Denarius Metals Corp. (Cboe CA: DMET | OTCQX: DNRSF) has signed a binding letter of intent with Europa Metals Ltd. (AIM: EUZ) to acquire 100% of the issued and outstanding shares of Europa Metals Iberia S.L., a wholly owned Spanish subsidiary of Europa which holds the Toral Zn-Pb-Ag Project in the Leon Province, Northern Spain. The closing of the Transaction is expected to occur no later than 31 October 2024.
Serafino Iacono, executive chairman and CEO, commented, “The transaction is in keeping with our vision of producing low-carbon metals within the European Union to support climate transition and the EU’s bid to secure the resources needed for technologies such as renewable energy and battery power. Our work to date provides us with confidence in the potential for the Toral Project to become a long-life underground mining operation which may supply material to the 5,000tpd processing plant at our Aguablanca Project in Spain. Completing the acquisition of 100% of the Toral Project through the transaction strengthens our liquidity and improves our flexibility to manage the development schedule for our projects in Spain without having to meet the specific obligations mandated under the option agreement. Later this year, we will commence work on the preparation of an updated mineral resource estimate followed by a preliminary economic assessment for the Toral Project.”
The company and Europa entered into a definitive option agreement dated 22 November 2022 pursuant to which the company was granted options to acquire, in two stages, up to an 80% ownership interest in EMI. In conjunction with its commitments under the first option, the company has been carrying out an exploration programme at the Toral Project since the beginning of 2023 and, to date, the company has funded approximately US$3.1M through a loan agreement dated 22 November 2022 between the company, Europa and EMI. In 2023, the company carried out a drilling campaign which comprised approximately 6,200m of validation and infill drilling in nine holes completed within the Toral Project’s known Indicated mineral resource area. All holes completed were successful in intersecting mineralization adjacent to selected, previously reported high grade intersections within the Toral Project’s indicated resource block. In addition, the formal application for a mining licence was also filed with the local authority in 2023 as required under the option agreement.
The purchase price for the company’s acquisition of a 100% equity interest in EMI will be the funds advanced under the loan agreement and an additional C$3.5M to be settled through the issuance of 7,000,000 common shares of the company at a price of C$0.50 per share. The common shares to be issued in the transaction will be subject to a hold period ending on the date that is four months plus one day following the issuance date. As a condition to closing, Europa will capitalize all amounts payable from EMI to Europa prior to closing such that on Closing, EMI shall not owe any funds or have any outstanding liabilities to Europa. The option agreement and the loan agreement will also be terminated on closing.
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